On July 25, 2019 Alkermes plc (Nasdaq: ALKS) reported financial results for the second quarter of 2019 (Press release, Alkermes, JUL 25, 2019, View Source [SID1234537736]).

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"Our second quarter results reflect the growth of VIVITROL and ARISTADA, driven by underlying unit demand and continued upside from our royalty and manufacturing business. While driving revenue expansion, we are making important investments to further accelerate growth of VIVITROL and ARISTADA, and continue to invest in our research & development programs. These investments are designed to support sustainable, long-term growth," commented James Frates, Chief Financial Officer of Alkermes. "Based on our results through the second quarter, today we are adjusting our expectations for ARISTADA net sales for 2019, to a range of $200 million to $210 million. While we remain encouraged by positive momentum in prescription trends and expected growth opportunities as we enter into the second half of the year, we are fine-tuning our guidance to reflect the current growth trajectory. Importantly, the financial expectations that we provided in February for the rest of our business, including our expectations for total revenues for the year, remain intact."

"The second quarter was highlighted by important data presentations for ARISTADA and ALKS 3831, as we work to establish Alkermes as a leader in schizophrenia. We also made substantial progress in our ALKS 4230 ARTISTRY immuno-oncology program, as we advanced our recommended phase 2 dose into the monotherapy expansion stage of our ARTISTRY-1 study in patients with renal cell carcinoma or melanoma," commented Richard Pops, Chief Executive Officer of Alkermes. "Looking ahead, we expect to make important pipeline progress throughout the remainder of the year, with regulatory action for VUMERITY, the planned submission of the NDA for ALKS 3831 for both schizophrenia and bipolar I disorder, and the first efficacy data for ALKS 4230 all expected before year-end."

Quarter Ended June 30, 2019 Financial Highlights

Total revenues for the quarter were $279.9 million, compared to $304.6 million for the same period in the prior year, reflecting growth in our proprietary product net sales, partially offset by a decrease in AMPYRAi revenues following generic entry in 2018. In addition, the quarter ended June 30, 2018 included $48.3 million of license revenue from the collaboration with Biogen for diroximel fumarate.

Net loss according to generally accepted accounting principles in the U.S. (GAAP) was $42.0 million for the quarter, or a basic and diluted GAAP net loss per share of $0.27. This compared to GAAP net loss of $32.6 million, or a basic and diluted GAAP net loss per share of $0.21, for the same period in the prior year.

Non-GAAP net income was $13.7 million for the quarter, or a non-GAAP basic and diluted net earnings per share of $0.09. This compared to non-GAAP net income of $45.6 million, or a non-GAAP basic and diluted net earnings per share of $0.29, for the same period in the prior year.

Quarter Ended June 30, 2019 Financial Results

Revenues

Net sales of VIVITROL were $88.2 million, compared to $76.2 million for the same period in the prior year, representing an increase of approximately 16%.

Net sales of ARISTADAii were $48.4 million, compared to $33.6 million for the same period in the prior year, representing an increase of approximately 44%.

Manufacturing and royalty revenues from RISPERDAL CONSTA, INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA were $91.9 million, compared to $85.2 million for the same period in the prior year.

Manufacturing and royalty revenues from AMPYRA/FAMPYRA were $9.8 million, compared to $19.7 million for the same period in the prior year, due to generic competition to AMPYRA entering the market in 2018.

Research and development revenues were $14.3 million, compared to $18.3 million for the same period in the prior year. These revenues were primarily related to the collaboration with Biogen for diroximel fumarate.

License revenue was $1.0 million. This compared to $48.3 million for the same period in the prior year, which reflected receipt of a payment from Biogen under the collaboration for diroximel fumarate.

Costs and Expenses

Operating expenses were $315.8 million, compared to $304.7 million for the same period in the prior year, primarily reflecting increased investment in the commercialization of VIVITROL and ARISTADA and in the development of ALKS 4230.

Financial Expectations for 2019

Alkermes is adjusting its financial expectations for ARISTADA net sales in 2019 based on year-to-date results. The company now expects ARISTADA net sales to range from $200 million to $210 million, decreased from its previous expectation of $210 million to $230 million. Alkermes anticipates that this slightly lower expectation for ARISTADA net sales will be offset by upside from royalty and manufacturing revenues and reiterates the remainder of its financial expectations for 2019 set forth in its press release dated Feb. 14, 2019, including its expectation for total revenues in the range of $1.14 billion to $1.19 billion, as well as GAAP net loss in the range of $135 million to $165 million and Non-GAAP net income in the range of $40 million to $70 million.

Recent Events:

ARISTADA

Presented new safety and tolerability data from the ALPINE (Aripiprazole Lauroxil and Paliperidone palmitate: INitiation Effectiveness) study at the American Society of Clinical Psychopharmacology (ASCP) annual meeting, which underscored the clinical utility of ARISTADA and long-acting therapies for schizophrenia.

ALKS 3831

Following completion of a pre-New Drug Application (NDA) meeting with the FDA, announced plans to expand the ALKS 3831 NDA to include an indication for the treatment of bipolar I disorder, in addition to the treatment of schizophrenia. The NDA for ALKS 3831 will include data from the completed ALKS 3831 ENLIGHTEN clinical development program in patients with schizophrenia as well as pharmacokinetic bridging data comparing ALKS 3831 and ZYPREXA (olanzapine).

VUMERITY (diroximel fumarate)

Biogen presented new interim tolerability data from the ongoing open-label, pivotal EVOLVE-MS-1 study in people with relapsing multiple sclerosis at the annual meeting of the Consortium of Multiple Sclerosis Centers (CMSC).

ALKS 4230

Initiated monotherapy expansion phase of ARTISTRY-1 to evaluate the efficacy, safety and tolerability of ALKS 4230 in treating patients with renal cell carcinoma or melanoma, following selection of the recommended phase 2 dose in the dose-escalation stage of ARTISTRY-1.

Conference Call

Alkermes will host a conference call and webcast presentation with accompanying slides at 8:00 a.m. ET (1:00 p.m. BST) on Thursday, July 25, 2019, to discuss these financial results and provide an update on the company. The webcast may be accessed on the Investors section of Alkermes’ website at www.alkermes.com. The conference call may be accessed by dialing +1 877 407 2988 for U.S. callers and +1 201 389 0923 for international callers. In addition, a replay of the conference call will be available from 11:00 a.m. ET (4:00 p.m. BST) on Thursday, July 25, 2019, through Thursday, Aug. 1, 2019, and may be accessed by visiting Alkermes’ website or by dialing +1 877 660 6853 for U.S. callers and +1 201 612 7415 for international callers. The replay access code is 13691972.